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Making Your First Million In China – As A Chinese School Principal!

Did you ever wonder how Chinese school principals who officially earn the equivalent of $8,000 – $10,000 per year can be driving very expensive Mercedes Benz, BMWs, Audis, Porsches, and Land Rover luxury cars? How can they afford to buy apartments costing more than 5 million yuan? Wonder no more…

Actually explaining this mystery also solves another of “Why do Chinese schools never hire directly and insist on hiring only through agents?” So here’s the scoop on both matters as revealed and confirmed by a former Vice-Principal at the huge H***** Kindergarten chain of Beijing. Now that she is safely residing abroad, she had no qualms about dropping the dime on her former employers which she claims is just “typical of the entire education industry in China”. Here is what she wrote to the China Foreign Teachers Union in an email accompanied with a 3:12 audio recording of a H***** principal complaining to an agent that “My payment is late again Wu, and if it happens one more time, I will replace you with another agent – do you understand?” (Translation confirmed to be accurate by two translators)

Chinese schools in China love having white-faced foreign teachers on their staff as status symbols that suggest to parents of new prospective enrollees that their school is international with a modern global curriculum. The thinly-veiled façade actually works in most cases. So schools will budget between 15,000 to 20,000 yuan per month to hire a foreign teacher and an average school of 500 students may have 5 to 7 foreign teachers on staff. ( 140,000 yuan Total average monthly budget for foreign teachers)

However, they will never advertise or recruit foreign teachers directly. Instead Principals opt to use a friendly agent who will advertise the position for 10,000 yuan per month. The extra 5,000-10,000 then gets split 50-50 between the agent and the principal. Multiply this by the 5-7 foreign teachers on staff and you will see that a principal more than triples her official salary each month and yet never can be directly implicated of corruption because the agent assumes all the risk. But since 80% of all agents and recruiters in China are not licensed more registered, and thus unregulated, or even monitored, the risk is almost non-existent. A sample contract recently supplied by American teacher Katherine Cox shows how one infamous Beijing agent (Rebecca Tang of China ESL) actually deducted 66% of the teacher’s salary! How much of this $ made it’s it way to the principal’s pocket. The industry standard is 50%. Our information is that in case of “problems” it is the agent’s duty to cover the expense of bribes.

Principals earn another 10,000yuan per month allowing parents of their students to be solicited and milked by other companies in the education business such as those who peddle books, music , dance, or art lessons, children’s photography, etc. by secretly selling the database of their enrolled students. A sample of such a database is below which include the child’s name, grade level, mother’s name and mobile telephone number.

Yet another truly unethical income stream generated by the Principals is calling the parents in for a private after school meeting to tell them that “Little Ying is falling behind the others in one subject or another and may get very low scores if she does not get some private tutoring.” And of course, the principal just happens to suggest a friend of hers who offers just such private lessons on weekends or after school. According to our vice-principal source, the standard kickback on this ploy is 2,000-3,000 yuan per student and at least 20% of the parents will be targeted for this scheme. So, 20% of 500 kids = 100 students X 2,000 yuan = 200,000 yuan per year. Now when you do the math on all of the above, you will solve yet a third mystery… Why foreigners are never hired as principals of Chinese schools – even if they are fluently bi-lingual. Why share all this tax-free cash with a foreigner?<

And of course, every year at Chinese New Years “spring break” there is the traditional “hongbao” (red envelope) that is a traditional gift usually reserved for Chinese families, and employees of government owned enterprises, but principals (and even some favorite teachers) collect one from all 300-500 students. What’s inside? Usually 5 or 10 of these…

The China Foreign Teachers Union has identified 37 such principals playing the above game and is submitting their report to the Minister of Justice when the new regime comes to power next month. (Read between the lines). If nothing is done within thirty days thereafter, they say they will publish their report on line for all to see. It will be interesting to see how this all plays out. 😉

Note To Foreign Teachers: Most international schools and top Chinese universities do not play this corruption game, but smaller universities certainly do. A crash course in foreign teacher fraud can be obtained in 30 minutes at www.ChinaScamBusters.com

If you find a China scam in progress, by all means, send us the details of what you know in strict confidence to tips@ChinaScamPatrol.com and we will discreetly investigate. If you have already been swindled, kindly warn others with a post at www.CleverChinaCheaters.com. Stay safe!